- Issuers of the first U.S. spot bitcoin ETF, including VanEck and CoinShares, are not confident that the SEC will approve ether exchange-traded fund applications.
- VanEck CEO Jan van Eck said he thinks the SEC will most likely reject the firm’s ether ETF application.
- The SEC has signaled that it might not be willing to approve an ether-backed investment product, as it considers the vast majority of crypto assets as investment contracts subject to federal securities laws.
The SEC has delayed its decision on approving an ether exchange-traded fund (ETF), leaving issuers of spot bitcoin ETFs doubtful that ether ETF applications will be approved. The implications could be significant for the burgeoning ether market.
Issuers Expect Rejection
VanEck CEO Jan van Eck said he thinks the SEC will likely reject his firm’s application for an ether ETF. He noted that the SEC provided comments for weeks before approving bitcoin ETFs, but the process seems to have stalled for ether.
Ark Invest CEO Cathy Wood, who also applied for an ether ETF, may face rejection as well, according to van Eck. An Ark Invest spokesperson was not immediately available for comment.
Jean-Marie Mognetti, CEO of CoinShares, which does not have an ether ETF application in the US, said he does not expect any crypto asset ETFs besides bitcoin to be approved this year.
Reasons for Caution
SEC Chair Gary Gensler has stressed that most crypto assets are investment contracts subject to securities laws. This may complicate approval of an ether ETF.
In addition, Mognetti suggested the SEC could be cautious about proof-of-stake, a protocol used by ether and other altcoins. Bitcoin uses proof-of-work, which the SEC has not objected to.
Market Impact
The possibility of an SEC-approved ether ETF has enthused the crypto community and helped boost ether prices. Ether has climbed around 10% over the past week on hopes of ETF approval.
If the SEC rejects or further delays a decision, ether prices could sink. The market implications of the SEC’s pending decision on ether ETFs remain substantial.
Conclusion
While bitcoin ETFs have been approved, the same prospects for ether funds look far less certain. The SEC has hinted at concerns that could obstruct authorization of ether ETFs. Despite the potential benefits, issuers believe rejection is likely, which could disappoint ether investors and weigh on prices.
